Conflict of Interest question.

EnderW1 (Virginia)
Posts: 1

Posted:

Some background: We are a small HoA 80 homes.
about 50% of the community all go to the same church. About 25% of the community is related to other members. Very close almost everyone knows everyone.
Even on our board there is a Mother and her son, and a Father and his son.

So my question is could there be a conflict of interest if any of those board members vote yes on something that gives one of there family members or fellow church goers a benefit. Part 2 is if someone isn't a church goer and fells they are denied things like timely repairs and/or replacements for broken objects because cause of this can that be a conflict of interest?

It seems to me that no matter what any of them do there has to be some feelings or interests involved because they live there and are all friends or not friends of there fellow members.

How is this covered by a board like this?

TimB4 (Tennessee)
Posts: 21,059

Posted:

Ender,

Having more than one member of a household on the Board is never a good idea. Unfortunately, if the membership isn't involved enough to be willing to volunteer, those who do volunteer will be the ones elected and make the decision for everyone else. The fix to this is to make sure there are enough volunteers to serve so family members aren't needed to fill the gap.

Who goes to what church is irrelevant. Every child typically goes to the same school but that doesn't affect how associations are ran. Therefore, what religious or social group they belong to is just as irrelevant.

As outlined in the Fairfax County Community Association Manual, Boards must act for the purposes of the cooperative, within the scope of its authority and in good faith.

Part 2 is if someone isn't a church goer and fells they are denied things like timely repairs and/or replacements for broken objects because cause of this can that be a conflict of interest?

VA § 13.1-871 defines conflict of interest as: A conflict of interests transaction is a transaction with the corporation in which a director of the corporation has an interest that precludes him from being a disinterested director.

Typically a conflict of interest is more often a perceived issue than an actual conflict. Typically, if there is a conflict, the person who has the conflict should abstain from voting on the issue (as this can help alleviate any issues caused by a members perception of an issue).

As outlined in the Fairfax County Community Association Manual, Boards must act for the purposes of the cooperative, within the scope of its authority and in good faith.

Based on what you provided, I would ask what were the reasons why they deferred your repairs? Perhaps it was a financial limitation, perhaps a liability issue or perhaps a safety issue that required repairs to be deferred.

For example: My Association only allots $6,000 per year for tree trimming. Recently we had an Arborist inspect every tree on our common area and identify what needed done. The cost of what was identified was $50,0000. Our budget simply didn't allow us to address every tree at one time. Therefore, with the aid of the Arborist, we prioritized what needed to be done. I am on the Board. One of the trees with a top priority is behind my property. I suspect that there may be some that perceive having this tree taken care of first and not one near their property as favoritism, conflict of interest, or a number of other things. In reality, the issue is that tree is in danger of falling on a house that is not part of our Association. This caused a liability issue for the Association that needed addressed. However, if those individuals who perceive it as favoritism never read the report or ask why this tree over that tree, they will keep that perception of the issue and may consider that this Board is only taking care of their property or their friends/neighbors property.

If you asked, what was the reason the board gave you as to why those repairs were not done?